Law on competition: collective bargaining agreement and partial devolution of the accruing employee’s severance indemnity

On 14 August 2017, the “Annual law on market and competition” (Italian law No. 124) has been published on the Official Gazette and it will become effective on 29 August. There are many novelty aspects to the new law, approved after two years of preparation. Concerning the supplementary social security, the law on competition introduced the possibility for employees to choose even just a partial assignment of the severance indemnity to the pension fund, thus modifying the text of the decree No. 252/2005. More specifically, the law establishes that the minimum percentage of severance indemnity accruing that the can be assigned to the supplementary social security can be agreed upon in the collective bargaining agreement. In fact, differently than in the past, contracts and collective bargaining agreements will have the possibility to establish which portion of the severance indemnity to assign to the supplementary social security and which, instead, to leave with the company. In this manner, the positive effect will be to overcome the objections of the employees related to the apparent loss of liquidity that will then be recovered at the end of the career. However, the regulation specifies that lacking instructions from the collective bargaining party, the assignment will continue to be in full. The same law also includes minor measures such as (i) an advance on the complementary income in the case of termination of work and (ii) payment of the individual amount accrued for the related tributary scheme.